Sydney, May 19, 2026, 03:03 AEST
- Brambles finished Monday at A$17.63, dropping 20.23% to its session low after getting hit by a downgrade related to pallet-repair limits in the U.S. Google
- The company lowered FY26 sales revenue growth guidance to 2%-3% and now sees underlying profit growth at 3%-5%, both figures at constant FX, so not including currency impacts.
- S&P/ASX 200 hit a seven-week low after Brambles and Elders warned on profit, piling pressure on Australian stocks. The Australian
Brambles Ltd dropped 20% Monday, marking its biggest one-day loss in more than 20 years. The pallet-pooling company lowered its annual profit forecast, blaming a backlog in its U.S. repair network that failed to meet customer demand. Shares ended at A$17.63, down A$4.47, with high volume. Google
The loss is significant for Brambles, which isn’t a minor player in transport. The company, known mostly for its CHEP brand, has a global reusable pallet, crate, and container system covering around 60 countries. North America and Europe account for most of its business.
ASX cash market was closed at the dateline. Normal hours for ASX are 9:59 a.m. to 4 p.m. in Sydney. The exchange’s 2026 holiday list does not include May 19 as a holiday. TradingHours
Brambles cut its FY26 sales revenue growth target to 2%-3% from 3%-4%. The company also reduced underlying profit growth guidance to 3%-5% from 8%-11%, both figures at constant currency.
The company said the issue started in April, mainly hitting the central and northeast areas of its U.S. service-centre network. The company pointed to more subcontractor turnover, labour shortages, and rising pallet-quality needs for automated customer plants. Demand also moved past what it had expected.
Brambles is expecting a US$60 million earnings hit for FY26. The company said about US$40 million of that is due to increased costs for repairs, handling, transport, and storage. The remaining impact comes from changes in its customer mix and lower volumes.
The company is moving pallets across its network, adding more repair sites, and purchasing roughly 2 million new pallets in the fourth quarter. Management says it should clear the bottlenecks by the end of the first half of FY27. The next update is set for its FY26 results on Aug. 20.
Brambles CEO Graham Chipchase said meeting customer needs was “non-negotiable” as he warned that ongoing problems “will weigh on FY26 and 1H27 financials.” Still, Chipchase added the issues don’t affect Brambles’ FY28 margin target.
Brambles said it will start a new US$400 million on-market buyback after wrapping up its current buyback of the same size. So far, Brambles has bought about US$370 million worth of shares under the existing US$400 million buyback, which also happened in the open market.
Brambles’ CHEP brand is one of the names in pallet pooling, where customers rent and reuse pallets instead of owning them. Other global players include IFCO Systems, PECO Pallet and China Merchants Loscam, Mordor Intelligence says. The downgrade was linked to Brambles’ failure to fix repair capacity inside its own U.S. network, not a shift in market share to those competitors. Mordor Intelligence
Australian shares dropped in a rough session, with the ASX 200 down around 1.5%. Elders slid as well after it slashed its outlook, fueling worries that a downgrade cycle is underway for corporate Australia. “That cycle was obviously in motion now,” UBS equity strategist Richard Schellbach said. Market Index
But Brambles said there are still risks. The company pointed to customer demand, supply chain efficiency, lumber and other costs, FX, and macro factors as variables. Fuel and transport costs tied to Middle East conflict could add more pressure. If U.S. labour stays tight or if demand stays higher than repair can handle, costs could stay elevated for longer than management expects.
